GM lost $15.5 billion last quarter alone
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GM lost $15.5 billion last quarter alone
GM posts $15.5 billion 2nd-quarter loss
Friday August 1, 8:04 am ET
By Tom Krisher and Dee-Ann Durbin, AP Auto Writers
General Motors posts $15.5 2Q loss on North American ills, charges for layoffs, strikes
DETROIT (AP) -- General Motors Corp. said Friday its losses widened to $15.5 billion in the second quarter as North American sales plummeted and the company faced expenses due to labor unrest and its massive restructuring plan.
The loss of $27.33 per share is the third-worst quarterly loss in the automaker's history. In the same period a year earlier, GM recorded a net profit of $891 million, or $1.56 per share.
Revenue for the April-June period was $38.2 billion, down $8.5 billion from a year earlier.
The company said its loss included $9.1 billion in one-time charges, including $3.3 billion for the buyouts of 19,000 U.S. hourly workers who left at the end of June and $2.8 billion in liabilities related to Delphi Corp., its former parts division.
It also included $1.3 billion worth of write-offs because of a decline in the value of GMAC Financial Services' portfolio of trucks and sport utility vehicles. GM owns 49 percent of GMAC, which has suffered big losses when leases end and it tries to sell the now-unpopular vehicles at depressed prices.
GM also took a $197 million charge related to the settlement of a nearly three-month strike at supplier American Axle and Manufacturing Holdings Inc., which shut down more than 30 GM plants. GM agreed to help American Axle fund worker buyouts as part of the settlement.
Without the one-time charges, GM lost $6.3 billion, or $11.21 per share. Twelve analysts surveyed by Thomson Financial predicted a $2.62 per share loss on revenue of $44.57 billion.
GM shares fell 7.4 percent to $10.25 in premarket trading from a close of $11.07 Thursday.
Ray Young, GM's chief financial officer, said the company burned through $3.6 billion in cash during the second quarter, which he attributed largely to reducing the company's inventory by nearly 90,000 vehicles to less than 800,000.
He said GM does not expect a similar reduction in future quarters, so the cash burn should be smaller for the rest of the year.
"In that respect, the negative cash flow in the second quarter is overstated," he said.
Young said GM ended the quarter with $21 billion in cash and $5 billion available through credit lines for total liquidity of $26 billion, which he called a strong position.
The company already has announced plans to generate another $15 billion in liquidity in the next 18 months, he said.
"We're going to get the second quarter behind us and just move ahead," he said.
The $15.5 billion loss is less than half GM's record $38.6 billion loss in the third quarter of last year. That loss was due to a charge for accumulated deferred tax credits. The second-worst loss was $21 billion in the first quarter of 1992.
GM said its revenues outside North America rose by $1.7 billion to $20.8 billion in the quarter, but those gains were more than offset by losses in North America, where high gas prices and the weak economy have wreaked havoc on the auto industry.
North American revenues fell by nearly $10 billion to $19.8 billion for the quarter as sales in the region fell 20 percent. Work stoppages at American Axle and several other facilities in May and June also contributed to the decline, GM said.
On July 15, GM announced a plan to raise $15 billion for its restructuring by laying off thousands of hourly and salaried workers, speeding the closure of truck and SUV plants, suspending its dividend and raising cash through borrowing and the sale of assets.
GM also said it would reduce production by another 300,000 vehicles, and that may prompt another wave of blue-collar early retirement and buyout offers, Young said.
"As our recent product, capacity and liquidity actions clearly demonstrate, we are reacting rapidly to the challenges facing the U.S. economy and auto market, and we continue to take the aggressive steps necessary to transform our U.S. operations," GM Chairman and Chief Executive Rick Wagoner said in a statement.
GM sold 2.29 million vehicles in the second quarter, down 5 percent compared with the previous year. The company said a record 65 percent of those sales were outside North America.
For the first half of the year, Toyota Motor Corp. outsold GM by 277,532 vehicles. It was only the second time Toyota beat GM in sales for the first six months of a year.
Friday August 1, 8:04 am ET
By Tom Krisher and Dee-Ann Durbin, AP Auto Writers
General Motors posts $15.5 2Q loss on North American ills, charges for layoffs, strikes
DETROIT (AP) -- General Motors Corp. said Friday its losses widened to $15.5 billion in the second quarter as North American sales plummeted and the company faced expenses due to labor unrest and its massive restructuring plan.
The loss of $27.33 per share is the third-worst quarterly loss in the automaker's history. In the same period a year earlier, GM recorded a net profit of $891 million, or $1.56 per share.
Revenue for the April-June period was $38.2 billion, down $8.5 billion from a year earlier.
The company said its loss included $9.1 billion in one-time charges, including $3.3 billion for the buyouts of 19,000 U.S. hourly workers who left at the end of June and $2.8 billion in liabilities related to Delphi Corp., its former parts division.
It also included $1.3 billion worth of write-offs because of a decline in the value of GMAC Financial Services' portfolio of trucks and sport utility vehicles. GM owns 49 percent of GMAC, which has suffered big losses when leases end and it tries to sell the now-unpopular vehicles at depressed prices.
GM also took a $197 million charge related to the settlement of a nearly three-month strike at supplier American Axle and Manufacturing Holdings Inc., which shut down more than 30 GM plants. GM agreed to help American Axle fund worker buyouts as part of the settlement.
Without the one-time charges, GM lost $6.3 billion, or $11.21 per share. Twelve analysts surveyed by Thomson Financial predicted a $2.62 per share loss on revenue of $44.57 billion.
GM shares fell 7.4 percent to $10.25 in premarket trading from a close of $11.07 Thursday.
Ray Young, GM's chief financial officer, said the company burned through $3.6 billion in cash during the second quarter, which he attributed largely to reducing the company's inventory by nearly 90,000 vehicles to less than 800,000.
He said GM does not expect a similar reduction in future quarters, so the cash burn should be smaller for the rest of the year.
"In that respect, the negative cash flow in the second quarter is overstated," he said.
Young said GM ended the quarter with $21 billion in cash and $5 billion available through credit lines for total liquidity of $26 billion, which he called a strong position.
The company already has announced plans to generate another $15 billion in liquidity in the next 18 months, he said.
"We're going to get the second quarter behind us and just move ahead," he said.
The $15.5 billion loss is less than half GM's record $38.6 billion loss in the third quarter of last year. That loss was due to a charge for accumulated deferred tax credits. The second-worst loss was $21 billion in the first quarter of 1992.
GM said its revenues outside North America rose by $1.7 billion to $20.8 billion in the quarter, but those gains were more than offset by losses in North America, where high gas prices and the weak economy have wreaked havoc on the auto industry.
North American revenues fell by nearly $10 billion to $19.8 billion for the quarter as sales in the region fell 20 percent. Work stoppages at American Axle and several other facilities in May and June also contributed to the decline, GM said.
On July 15, GM announced a plan to raise $15 billion for its restructuring by laying off thousands of hourly and salaried workers, speeding the closure of truck and SUV plants, suspending its dividend and raising cash through borrowing and the sale of assets.
GM also said it would reduce production by another 300,000 vehicles, and that may prompt another wave of blue-collar early retirement and buyout offers, Young said.
"As our recent product, capacity and liquidity actions clearly demonstrate, we are reacting rapidly to the challenges facing the U.S. economy and auto market, and we continue to take the aggressive steps necessary to transform our U.S. operations," GM Chairman and Chief Executive Rick Wagoner said in a statement.
GM sold 2.29 million vehicles in the second quarter, down 5 percent compared with the previous year. The company said a record 65 percent of those sales were outside North America.
For the first half of the year, Toyota Motor Corp. outsold GM by 277,532 vehicles. It was only the second time Toyota beat GM in sales for the first six months of a year.
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From: Austin
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Joined: May 2004
Posts: 2,043
From: Shelbyville, IN
The DI V6 is pushing 300hp, I think they will sell quite a few of those models.
And alot of you are grouping "Trailer Park Boys" with "Rednecks". Most rednecks I know wouldn't even drive a car; all Trucks.
Of course I don't live in the hills, "Farm Boys" are quite a different crew then "Hilljacks". With a lot more money as well.
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Joined: Aug 2001
Posts: 2,400
From: Michigan's left coast
Put another way - simply getting the Volt into showrooms ain't gonna do sh*t to save GM. There are enormous changes that must take place simply to get GM to survive long enough for the Volt to see the light of day.
My opinion on GM's future remains sharply pessimistic, and will stay that way until the company exhibits something resembling leadership and vision.
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Joined: Sep 2005
Posts: 61
Assuming that GM can sell 100,000 Volts per year, it would take a net profit of $244,000 just to cover its operational losses (if you extrapolate last quarter's op losses out to a full year).
Put another way - simply getting the Volt into showrooms ain't gonna do sh*t to save GM. There are enormous changes that must take place simply to get GM to survive long enough for the Volt to see the light of day.
My opinion on GM's future remains sharply pessimistic, and will stay that way until the company exhibits something resembling leadership and vision.
Put another way - simply getting the Volt into showrooms ain't gonna do sh*t to save GM. There are enormous changes that must take place simply to get GM to survive long enough for the Volt to see the light of day.
My opinion on GM's future remains sharply pessimistic, and will stay that way until the company exhibits something resembling leadership and vision.
So true. Every quarter is a massive "one-time" loss.
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Joined: Apr 2000
Posts: 3,748
From: New England
think the board at GM has to go..downsize the management to a fast n act fast management department that can design built and adapt to this market..think about it..2 years ago muscle cars GM has comming out now would of sold...but thats one in a long list of many things.
